The Cycle of Leadership: How Great Leaders Teach Their Companies to Win

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In The Leadership Engine, Noel Tichy showed how great companies strive to create leaders at all levels of the organization, and how those leaders actively develop future generations of leaders. In this new book, he takes the theme further, showing how great companies and their leaders develop their business knowledge into a?Yachable points of view,a??pend a great portion of their time giving their learnings to others, sharing best practices, and how they in turn learn and receive business ideas/knowledge from the employees they are teaching. Calling this exchange a virtuous teaching cycle, Professor Tichy shows how business builders from Jack Welch at GE to Joe Liemandt at Trilogy create organizations that foster this knowledge exchange and how their efforts result in smarter, more agile companies, and winning results. Some of these ideas were showcased in Tichy's recent Harvard Business Review article entitled, a?? Ordinary Boot Camp." Using examples from GE, Ford, Dell, Southwest Airlines and many others, Tichy presents and analyzes these principles in action and shows how managers can begin to transform their own businesses into teaching organizations and, consequently, betterperforming companies

Noel M. Tichy is a professor at the University of Michigan Business School

Acknowledgments

p. iv

Foreword to the Paperback Edition

p. vi

Preface to the Paperback Edition

p. xvii

Introduction

p. xxi

The New DNA of Winning: A Virtuous Teaching Cycle

p. 1

Two Roads to Winning: Hypertransformation and Hypergrowth

p. 24

Building the Teaching Organization: Knowledge Creation Through the Virtuous Teaching Cycle

p. 48

You Must Start with a Teachable Point of View

p. 73

How to Develop a Teachable Point of View

p. 99

The Paradox of Power: Overcoming Resistance on the Top Team

p. 132

Building the Leader/Teacher Pipeline: Developing Leaders for the Future

They Create Attributes Needed in the Knowledge Economy• Maximum use of everyone's skills and talent.• All-level alignment needed for smart, speedy action.

For fifteen years, Jack Welch drove the GE transformation from his teachable point of view that every business in GE needed to dominate its market. "No. 1, No. 2, fix, close or sell," was the mantra by which every GE executive lived or died. Then, in 1995, a group of middle managers in a class at GE's Crotonville leadership development institute sent Welch a startling message. The No. 1 or No. 2 vision, they told him, was stifling growth. Instead of scrambling to grow, leaders in GE were gaming it. GE was missing opportunities because its business leaders were defining their markets too narrowly so that they could be No. 1 or No. 2.

Welch's response to this "punch in the nose," as he described it, was to revise his thinking. In not very long, he came out with a new declaration: Define your business in such a way that you have less than 10% market share. Then direct your creativity and energy to finding new ways to attract customers. This change in outlook, according to Welch, was a major contributor to GE's double-digit rates of revenue growth in the latter half of the 1990s.

This story illustrates what I call a "Virtuous Teaching Cycle" at work. In the process of teaching, the teacher, Welch, learned something valuable from the students, which made him smarter and prompted him to go out and teach a new idea. Such interactions are an essential reason why GE has been so successful over the past two decades and why it is likely to remain one of the world's most valuable companies for some time to come.

Jack Welch handed over to Jeff Immelt a world-class Teaching organization in which everyone teaches, everyone learns and everyone gets smarter every day. The Virtuous Teaching Cycle is the dynamic process that keeps it working. Jeff Immelt, the new CEO of GE, is a product of that Teaching Organization, and he believes that the most important core competency of a GE leader is to be a teacher.

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In Fort Benning, Georgia, my colleague, Eli Cohen, while doing the research on The Leadership Engine book, watched a platoon of Special Operation's Rangers conduct a raid on a terrorist camp. The Rangers team entered a compound of terrorists (actually, army role players) who were well armed and also had chemical weapons. As the simulation unfolded, Eli saw that it was anything but the well orchestrated ballet he expected. It was chaos. But, such simulations aren't, as some people might think, opportunities to become perfect in choreographed maneuvers, which seldom if ever work on the battlefield. Instead, they're meant to season soldiers to make split-second decisions in difficult circumstances. They are designed to develop functioning leaders, able to accomplish their mission despite the obstacles, rather than lock-stepped martinets. So, after the exercise came the After Action Review.

In the After Action Review at Fort Benning, one of the NCOs said:

Don't forget: What gets the job done is bold, aggressive leadership. Nothing went according to plan. We were supposed to face a chain-link fence: We faced triple-strand razor wire. The enemy wasn't supposed to have night vision goggles, but they did, so we were compromised before we breached the fence. Our radios were supposed to work: They didn't.

That's going to happen. But we got it done because some men stepped up and made decisions. When the alpha leader went down, his team leads took charge. When the communications didn't work, the lieutenant didn't fiddle with the radio or yell at his communications specialist. He ran around to find out what was going on and gave orders. When the fence turned out to be razor wire, the bravo squad leader changed his approach and commandeered two men to help get everyone into the compound.

Throughout the After Action Review an observer facilitated the dialogue, asking questions such as: "What were the conditions that caused you to do this? Why did you make that decision? Knowing what you know now, what would you have done differently?"

In a later conversation, General Pete Schoomaker, former head of SOF, explained the process to us. After an exercise "we stop and say, 'Now let's go back to the beginning.' So, we go through the mission phase by phase, using a formal process called an After Action Review. From privates to generals, everyone who had anything to do with the operation sits down and reviews what happened." Everyone contributes and learns from the others. It is a Virtuous Teaching Cycle?

The Virtuous Teaching Cycle

In The Leadership Engine, I wrote about the importance of leaders developing leaders. A key theme of that book was that winning companies win because they have leaders at all levels, and those companies have leaders at all levels because their top leaders make developing other leaders a priority. They personally devote enormous amounts of time and energy to teaching, and they encourage other leaders in the company to do the same. This book builds on that work and adds a critical element.

Winning leaders are teachers, and winning organizations do encourage and reward teaching. But there is more to it than that. Winning organizations are explicitly designed to be Teaching Organizations, with business processes,organizational structures and day-to-day operating mechanisms all built to promote teaching.

More importantly, the teaching that takes place is a kind of teaching. It is interactive, two-way, even multi-way. Throughout the organization, "teachers" and the "students" at all levels teach and learn from each other, and their interactions create a Virtuous Teaching Cycle that keeps generating more learning, more teaching and the creation of new knowledge. Virtuous teaching cycles are what keep people in winning companies getting smarter, more aligned and more energized every day. Teaching Organizations make them possible.

Excerpted from Cycle of Leadership: How Great Leaders Teach Their Companies to Win by Noel M. Tichy All rights reserved by the original copyright owners. Excerpts are provided for display purposes only and may not be reproduced, reprinted or distributed without the written permission of the publisher.